The Benefits of Prepaid Debit Cards

Photo Courtsey: Iryna_B/

Electronic payment is everywhere you go. From a shop with a physical location to an online store, you can pay for anything with a card. Some people are turning to prepaid debit cards to take care of their financial transactions. There are several advantages to prepaid debit cards, and when you consider them, you may decide that using one is for you. Here are some of the benefits of prepaid debit cards.

They’re a Good Solution for People with No Credit or Poor Credit

If your credit is less than perfect but you want a way to make electronic payments or purchases, a prepaid debit card may be a good option for you. There’s no credit check involved in a prepaid debit card, but at the same time, these cards also don’t affect your credit in a positive or negative way, which may work to your advantage if you’ve had trouble with credit in the past. If you can’t qualify for a debit or credit card, you’ll be able to enjoy many of the same functions with a prepaid card. With some cards, you may even be able to have your employer direct deposit your payroll.

You Can Use Them the Same Way You Use a Credit or Debit Card

One of the best advantages to a prepaid debit card is that they have most of the same functions as a traditional credit or debit card. WIth many cards, you can get cash from an ATM (often with fees, of course), and you can use them to make purchases online or at stores. Most prepaid debit cards offer some form of protection against fraud, loss or theft, too. If your prepaid debit card carries a major card brand — like Visa, MasterCard, American Express or Discover — you can use it at any place around the world that accepts those cards.

They Can Be an Effective Alternative to Traditional Banking

Some people use prepaid debit cards instead of having traditional bank accounts. Prepaid debit cards can be effective for people in rural areas or other places where bank services aren’t easily available. You can reload a prepaid debit card online or by phone without having to go into a bank branch. Prepaid debit cards don’t have the same age limitations as credit or debit cards from banks. There are even some advantages for prepaid debit cardholders that go beyond traditional banking, including no overdraft fees (although prepaid debit cards often have fees of their own) and a certain measure of privacy. Some government agencies are loading benefits onto prepaid debit cards for the convenience and lower overhead of not having to print and ship checks.

They’re Great for Temporary Use or Travel

If you’re looking for an option to keep your vacation under budget, you can purchase a prepaid debit card, load your vacation budget on it and be sure you don’t overspend. And even though some cards don’t offer the same protection as a credit card, a lost or stolen prepaid card is much better than losing credit or debit information if someone steals your card. Prepaid debit cards have other advantages for temporary use. If you’re in a situation where you don’t want purchases to affect your credit score (for example, if you’re buying a house or have a business loan in process), you can load a prepaid debit card and use it for a short period of time.

They’re a Modern Way to Teach Financial Responsibility to Kids

Instead of giving your kids a cash allowance when they earn it, why not put funds on a prepaid debit card? Your kids can learn the value of budgeting while learning to control spending using modern technology. When the money on a prepaid debit card is gone, it’s gone, so kids can learn what happens when they overspend. It’s also a good way for them to keep track of what they spend and get used to budgeting, all while using technology. Prepaid debit cards often have protection if your child loses theirs or someone steals it, which is better than he or she losing cash forever. Your kids can be on the road to financial responsibility by practicing with a prepaid debit card.